Financial “bomb” discovered in Britain

Investec analysts: Britain's energy crisis could lead to increased poverty

The fuel crisis in Britain, exacerbated by the massive bankruptcy of energy supply companies due to gas prices, has become a financial bomb for many households in the country and may lead to an increase in poverty. The Guardian writes about it.

Analysts at the Investec bank have found that in the coming winter for every resident of Britain, monthly spending may increase by 120 pounds sterling (159.6 dollars). Collectively, consumers in England, Scotland and Wales could experience additional costs of £ 3.2bn ($ 4.25bn). The increased financial burden is associated with the debts of bankrupt gas and electricity suppliers, which were forced to leave the country's market due to record gas prices at the global level. The bank's analysts are confident that not all households will be able to withstand such a load.

“This is a financial bomb for households across the country. Another item of expenditure for citizens, which has appeared due to the situation on the energy markets, “- said the coordinator of the British movement” End Fuel Poverty “Simon Francis. According to him, the current system of housing and communal services is broken and long-term reforms are needed. At the same time, the government should provide urgent support to people who face fuel shortages this winter.

“The string of supply chain failures is likely to result in significant additional costs for every household in the UK. The problem with fuel shortages, inflation and commodity prices is likely to lead to an increase in electricity bills, ”- said the representatives of the bank. At the same time, electricity bills in the country have already grown from an average of 1.11 thousand pounds sterling (about 1.4 thousand dollars) per year to 1.27 pounds sterling (1.68 thousand dollars) per year compared to October. p>

In April 2022, analysts expect a sharp increase in energy prices, which, in turn, will lead to a wave of non-payment of bills among citizens. In total, Britain can get 742 thousand additional insolvent households. At the same time, according to Investec analyst Martin Young, it is difficult to determine the total damage to households in the country from the energy crisis. Already obtained data of financial losses may be revised in the future.

The massive bankruptcy of energy companies in Britain began in September. At the same time, UK Energy Minister Kwasi Quarteng promised that the British would not be left without electricity and gas. According to him, the regulator of the country's energy markets (Ofgem) will ensure the supply of gas and electricity to consumers, even if their supplier waives its obligations. The costs of supporting the industry for taxpayers have been estimated at billions of pounds sterling. However, the country's authorities are confident that domestic gas production and imports from Norway will be sufficient to meet the country's energy needs.